Friday, March 6, 2009

Peachtree-Pine for sale

Good news - the AJC reports that the Peachtree and Pine shelter is up for sale. They are asking for $10.5 million, or $109/building sf. That doesn't strike me as terribly excessive, although it has been a while since I've had access to good comp data and I have no idea how bad current market conditions have been to commerical property values. All I can do to is try and remember sales off the top of my head, and then look them up on the county assessor's webpage.

The closest near-empty, low-rise, former industrial building in Midtown that I can think of that sold recently is 563 Spring Street, which sold about a year and a half ago for $84/sf. I think that building might have had a few tenants at the time of the sale, I'm not sure, but I think it then underwent renovations. Given the prominance of the Peachtree and Pine site, $109/sf seems at least in the right ballpark, at first glance. Any brokers or agents with access to data, please let me know in the comments if I'm way off base.

As a land deal, the price is too high - the land for 1010 midtown sold for $217/sf in mid-2006, and this is for sale at $353/sf. You'd have to assume prime midtown land increased at something like 19.25% per year over the last 2.75 years. No one would buy this building at that price to tear it down. This is as it should be, because it has some historical value. It graces the cover of an Atlanta architecture book I mentioned some time ago, and is the work of a famous local architect. It was originally known as the Motor Services Building.

Anyway, I like to go through this little exercise to see how serious the Task Force is about selling. I have no idea if it is a "good deal" without doing a lot more work, but it doesn't appear as though the price is unrealisticlly high. You see that sort of thing when an owner doesn't really want to sell or has an inflated sense of what the land is worth and isn't going to be reasonable.

When the city was cutting off the shelter's water, I laid out my thoughts on what I wanted to happen to the Peachtree-Pine shelter:

I certainly don't like the shelter, and I want it to close. I am not going to cackle with glee if they get shut down, though, and feel uncomfortable rooting for things like shutting the water off.

Ideally, I would like to see the people that run it realize they aren't helping, and close on their own.

I am sure the decision to sell is in some way a response to pressure from the city, but it is nice to think that the Task Force is seeing the situation in a reasonable light. Developer Gene Kansas is helping sell the building:

Kansas said that while he thinks the Task Force would “love to stay in the building, the fact of the matter is that the Task Force only uses about 30 percent of that entire building.

“It’s very under-utilized, and you’ve got a premium location and, frankly, a use that’s not desired on Peachtree,” Kansas said...

“We feel like it’s a great time to go out and look at the other options,” Kansas said of the effort to sell the property and relocate the shelter. “We can get a better building that’s a better fit for a lot less money.”

I hope someone buys the building, although it is disappointing that they decided to sell during the worst recession in a quarter century (so far). This blog will have a terriffic screed where my head explodes if no one buys the building and the Task Force claims that no one else wanted it, so they will just stay there forever.